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Economic Consequences and the Motive to Discriminate:

Economic Consequences and the Motive to Discriminate: Past research indicates that increasing the economic consequences of evaluations should theoretically discourage discrimination by making it more costly. I theorize that such consequences may also encourage discrimination in settings in which evaluators may be motivated by performance expectations, e.g., stereotypes. I explore this theory using data from an online lending platform whose loan guarantee policy reduced the potential economic consequences of using borrowers’ demographics during lending decisions. I find evidence that with the policy in place, lenders evaluated female borrowers less favorably than male borrowers. This finding is consistent with the theory that the policy discouraged performance-motivated discrimination (that driven by beliefs about performance abilities) and simultaneously encouraged consumption-motivated discrimination (that driven by a like or dislike of others because of their demographic traits). Because I theorize about underlying motives for discrimination, the insights developed here should apply to a wide range of types of discrimination that vary according to these motives, including classic taste-based discrimination, homophily-driven discrimination, statistical discrimination, and status-based discrimination. Economic consequences may therefore represent an important dynamic link between different types of discrimination. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Administrative Science Quarterly SAGE

Economic Consequences and the Motive to Discriminate:

Stroube, Bryan K.
Administrative Science Quarterly , Volume 67 (1): 30 – Jul 8, 2021
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References (76)

Publisher
SAGE
Copyright
Copyright © 2022 by Johnson Graduate School, Cornell University
ISSN
0001-8392
eISSN
1930-3815
DOI
10.1177/00018392211029930
Publisher site
See Article on Publisher Site

Abstract

Past research indicates that increasing the economic consequences of evaluations should theoretically discourage discrimination by making it more costly. I theorize that such consequences may also encourage discrimination in settings in which evaluators may be motivated by performance expectations, e.g., stereotypes. I explore this theory using data from an online lending platform whose loan guarantee policy reduced the potential economic consequences of using borrowers’ demographics during lending decisions. I find evidence that with the policy in place, lenders evaluated female borrowers less favorably than male borrowers. This finding is consistent with the theory that the policy discouraged performance-motivated discrimination (that driven by beliefs about performance abilities) and simultaneously encouraged consumption-motivated discrimination (that driven by a like or dislike of others because of their demographic traits). Because I theorize about underlying motives for discrimination, the insights developed here should apply to a wide range of types of discrimination that vary according to these motives, including classic taste-based discrimination, homophily-driven discrimination, statistical discrimination, and status-based discrimination. Economic consequences may therefore represent an important dynamic link between different types of discrimination.

Journal

Administrative Science Quarterly – SAGE

Published: Jul 8, 2021

Keywords: discrimination; motives; online lending; China; audience evaluations

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